IMF to create new short-term government lending system

The International Monetary Fund is drafting a proposal to offer short-term lines of credit to ailed governments in an attempt to reduce the threat of a widespread financial collapse, The Wall Street Journal reports. The program, which officials hope to unveil and approve during the Group of 20 meetings of industrialized and developing economies, also has the backing of key global finance leaders. While the jury is still out on whether or not Greece will be forced to default on its debts, the Mediterranean nation, along with Portugal and Ireland, has received help from the IMF in the form of long-term credit lines. This new proposal will focus on offering short-term loans to countries in an effort to preempt a financial crisis. "Under a draft plan, the IMF would offer short-term credit lines equal to roughly three times a country's contributions to the fund," reports Ian Talley for the Journal. "The lines would complement financing from the European bailout fund and the European Central Bank. The credit lines for those two countries could double to roughly $100 billion combined once their IMF contributions increase next year."